Continued fall in prices & increased tariffs boost rooftop solar

How do you see rooftop panning out in the next five years, esp. domestic rooftop projects?
GoI has set a very ambitious target of achieving 40 GW of rooftop solar by 2022. The sector has witnessed substantial growth in the past few years and the current installed on-site capacity is a little over 1,000 MW. With the current progress and growth rate, the set target looks ambitious but not unachievable.

As of today, the vast majority of rooftop solar capacity is on commercial and industrial rooftops, as well as those of government buildings and educational institutions. Domestic rooftops have enormous potential, but the economics are challenging today. For this segment to take off, it will require a combination of a continuing fall in solar prices and perhaps more importantly, a continuing increase in domestic power tariffs. Finally, the industry will need to adjust its existing business models to effectively capture and aggregate volumes on domestic rooftops.

What is your strategy to capitalise on the potential?
We are the market leader in rooftop solar, and have witnessed consistent two-three times growth in the past several years. We see enormous potential in the segment going forward, and believe that our continued focus on the corporate and institutional segments will allow us to maintain our leadership. We see open access solar as complementary to our rooftop business, and we also see expansion there as an important component of our growth in the next several years.

What are the challenges that have to be ironed out?
The largest challenge today is the implementation of net-metering policies, which remains patchy across various states in the country. While the policies are aimed at increased adoption of rooftop solar, the implementation often has an opposite effect, creating hurdles and delays for consumers who want to avail net metering.

How much of a challenge do varying state policies pose and which states are doing it right?
In rooftop, the most important enabling policy is net metering, and most states have net metering policies today. Telangana, which as AP, was the first state to implement net metering, recently tweaked its net metering policy to increase the project cap and broaden its applicability. This is a very positive step which has already allowed us to expand our rooftop plants in the state, and I hope to see the same spirit replicated elsewhere.

In open access, Karnataka's current solar policy is the most favourable in the country. Aside from the economic concessions it provides, it also give clarity on grid charges for 10 years, which is gives a lot of confidence to investors. Regardless of the magnitude of the benefits in different states, I hope to see states provide long-term clarity on the charges and treatment solar generators can expect, so they can feel comfortable making investments there.

What benefits and payback periods do investors get at current installation costs?
The payback period for a project is typically seven to eight years, depending on the project specifics.

Some tax benefits are available, but these are largely being phased out.

How does 'pay-as-you-go' model work?
CleanMax Solar provides 'OPEX model'to corporates and institutional clients. The zero investment, hassle free model enables corporates to adopt solar power and only pay as per their usage. Depending on the grid tariff in that location, our solar tariffs can typically provide a cost savings of 20 per cent or more.

If GoI assumes the role of a facilitator, can we achieve higher installations in next 5 years?
Nothing is impossible, but I think the rooftop target of 40 GW in particular is very ambitious, and it is more meaningful to concentrate on how to achieve this target than how to surpass it.

One easy way to increase volumes quickly would be to remove arbitrary caps on rooftop capacity under net metering - 1 MW in many states. On technical grounds, the cap should be based on the evacuation infrastructure, which will vary by site and will be much higher for many large facilities. Removing or adjusting this cap would be an easy way to very quickly increase rooftop volumes.

What growth have you witnessed in the last 2 years? What is your market share?
CleanMax Solar is India’s largest on-site solar power providers with 23 per cent market share as per the latest report from Bridge to India. Catering to corporates and institutional clients, the company has catered to some major clients in across the automobiles, manufacturing, food & chemicals industries, IT companies, and educational institutes, etc. Our market share in most of these segments is greater than 50 per cent. CleanMax Solar has witnessed 3x growth in the last financial year with a turnover of Rs 400 crore, and a similar growth rate in the previous few years.

How much projects you’ve commissioned in India (commercial, residential)?
We have commissioned 200 plus rooftop projects across India, and have a current installed rooftop capacity of more than 80 MW, with another 20 MW under construction. In addition, we have more than 60 MW of solar farm capacity, in Karnataka and Tamil Nadu, and much more on the way.

What is the industry doing towards raising awareness among institutions and citizens?
There are various methodologies or mechanisms that can be used to spread awareness about solar power adoption.

Firstly, solar power can be a cost saver, not an additional cost. For commercial, industrial and institutional roofs in particular, solar power is already cheaper than grid power.

Focusing on the 2022 vision, the Central and state governments, as well as regulators, have also implemented policies and subsidies that are favourable for solar power adoption. For example: Net metering policies that further improve the economics.

Finally, regulators have an important role in encouraging and easing adoption of solar. Awareness-building among policymakers and electricity regulators, particularly about rooftop solar, is as important and consumer education.